Context: The Ministry of Labour and Employment is developing a transaction-based pension policy aimed at providing social security benefits to gig workers in India. This initiative seeks to address the employment challenges faced by gig workers, who often work across multiple platforms without a fixed wage.
Under this policy, pension contributions will be linked to wage transactions, ensuring a secure financial future for nearly 1 crore gig workers across the country.
How the Pension Policy Will Work
The proposed pension scheme will function through the e-Shram portal, where each gig worker will be assigned a Universal Account Number (UAN). The key features of this system include:
- Pension deductions will be linked to workers’ earnings from multiple platforms.
- Each platform (employer) will contribute to the pension on a per-bill basis.
- A standardized contribution structure, similar to the GST system, where both the worker and employer share the pension contribution.
By integrating this policy with the e-Shram portal, which was launched in 2021 to create a National Database of Unorganised Workers (NDUW), the scheme will offer comprehensive social security. As of January 2025, over 30 crore workers have registered on the portal. The UAN system will track workers’ employment history across different platforms, ensuring transparency and accessibility to benefits like health insurance and other welfare schemes.
Who Are Gig Workers?
A gig worker is an individual who takes on temporary, flexible jobs that do not follow the traditional employer-employee relationship. These jobs are often found through online platforms or on a contractual basis instead of permanent employment with a single company.
Understanding the Gig Economy: The gig economy refers to a labor market driven by short-term, flexible work arrangements. This sector has grown rapidly, especially with the rise of online platforms like Uber, Amazon, and freelance websites. In India, the gig economy has expanded significantly, offering employment opportunities across diverse sectors.
Types of Gig Workers
Gig workers can be classified into two main categories:
· Platform-based Gig Workers: These workers rely on digital platforms like Uber, Swiggy, Amazon, or Upwork to find jobs. They connect with clients through online services.
· Non-platform Gig Workers: These workers engage in contractual or temporary jobs in traditional sectors like construction or manual labor without using digital platforms.
Advantages of Gig Work
· Flexibility: Gig workers can set their own work hours and choose assignments based on their availability and preferences.
· Diverse Work Opportunities: They can engage with multiple platforms and industries, gaining varied skills and experiences.
· Independence: Many gig workers function as their own bosses, allowing them to control their work-life balance.
Challenges Faced by Gig Workers
· Lack of Job Security: There are no guarantees of long-term employment, making financial stability uncertain.
· Inconsistent Income: Earnings fluctuate based on work availability and market demand.
· Limited Social Security: Unlike traditional employees, gig workers often lack benefits like health insurance, paid leave, or retirement plans.
· Risk of Exploitation: Many gig workers have minimal legal protections and may face unfair practices from platforms or employers.
Conclusion
The proposed pension policy marks a significant step in ensuring financial security for gig workers in India. By linking pension contributions to wage transactions and integrating them with the e-Shram portal, the government aims to standardize benefits for gig workers across multiple platforms.
While gig work offers flexibility and independence, challenges like job insecurity and lack of social security persist. This policy is expected to bridge that gap, offering gig workers a structured pension system and a more secure future.
